We live in a world where compensation depends on a variety of factors that may not actually be correlated to the true value of the role for which we are being paid.
Picture this: you walk into your hometown toy store, find something you like, and head to the register. You realize there’s no price tag. Prices are hidden. You learn that the prices at this store are not consistent across toys or across customers. In fact, you find out that what you’ll be charged could depend on your gender, race, age, or even where you went to college.
Even more peculiar, when it’s your turn to pay, the cashier asks you what you expect to pay for your new toy. They might even ask you what you’ve paid for a similar toy at a different store up the street.
Sound absurd? It is. Yet, it’s precisely how our world works today.
We live in a world where compensation – what we earn, and therefore how much we have to spend – depends on a variety of factors that may not actually be correlated to the true value of the role for which we are being paid.
Designing compensation packages today tends to be far more art than science. The process is dictated not by competent tools crunching reliable data but by under-equipped talent acquisition teams scrambling to make sense of disparate historical and market data on their way to putting together a package they hope passes as competitive, fair, and defensible. Candidate demographics become unsound proxies that drive pay decisions.
But this introduces significant risk of unfair pay outcomes. For example, influences like affinity bias, which causes us to perceive those who look, talk, and act like us to be more trustworthy, credible, and competent, prey on such subjective and ad hoc decision-making processes. Without a way to ensure rigor, structure, and consistency in our compensation strategies, companies and employees alike are in the dark about pay bias. Even companies intent on addressing pay bias simply lack the tools they need to fulfill their promises for every hire. Talent acquisition teams are doing their best with the resources they have.
I want to live in a future where everyone understands their pay and trusts the process that defined it.
The more you learn about real world pay practices, the more they begin to look like our hometown toy store. Yikes.
But now, we have the technology to make pay bias – and many other questionable pay outcomes – a thing of the past.
Imagine a world where:
- Recruiters confidently and consistently create fair and competitive offers
- Leaders truly believe in – and, importantly, are comfortable sharing – their company’s pay practices
- Candidates trust the offers they receive and the people delivering them
A dear friend and mentor once advised me to create the future I want to live in. I want to live in a future where discretionary and secretive pay practices are difficult-to-believe remnants of history, replaced by ones that are open, accountable, and well-understood by all stakeholders.
We started Compa to build that future. Pay practices don’t have to be as mysterious and unfair as the prices in our toy store. Everyone should understand their pay and trust the process that defined it. And everyone’s dollar should be worth the same amount when they walk into their hometown toy store.